State-owned Coal India will kick off the next round of coal auction aimed at the non-regulated sector, including those dealing in sponge iron, by this year- end or early 2018.
The decision comes as a dozen power plants are staring at a bleak scenario for want of coal.
"Of a little over 50 mt of coal earmarked for the ongoing fiscal for the non-regulated sector, including sponge iron, cement and CPPs (captive power plants), Coal India (CIL) will auction linkages of around 25 million tonnes (mt) either in December or January," a senior government official said.
Last month, the government had started the auction of 27 mt of coal for the cement sector, which will be over by the end of this month, the official added.
Coal India (CIL) conducted the first round of auction of coal linkages for sponge iron, cement, CPP and other sub- sectors under the non-regulated sector during June to October 2016. Of the total 23.75 mt earmarked for the fist tranche, 22.14 mt of coal was booked.
The second instalment of the auction was held during January-June, when a total of 14.50 mt of non-coking coal and 0.26 mt of coking coal was booked.
The Cabinet had last year approved coal supply through the auction route to non-regulated sectors.
The auction has been envisaged as a transparent mechanism of linkage allocation based on competitive bidding.
Till now, the Standing Linkage Committee has been deciding on allocation of long- and short-term linkages for the sectors, including power and steel.